HAMILTON, BERMUDAMon Apr 29, 2002 —
HAMILTON, BERMUDA, April 29, 2002 -- XL Capital Ltd ("XL" or the "Company") (NYSE: XL) today reported that net income for the first quarter ended March 31, 2002 was $89.5 million, or $0.65 per share, compared with $218.9 million, or $1.73 per share, in the first quarter of 2001. Net operating income for the first quarter of 2002 was $210.4 million, or $1.53 per share, compared with $156.7 million, or $1.24 per share, for the quarter ended March 31, 2001.

Results for the quarter ended March 31, 2002 include the results of Winterthur International, which was acquired with effect from July 1, 2001. They also include the results of Le Mans R, which is accounted for as a consolidated subsidiary with effect from January 1, 2002. In the quarter ended March 31, 2001, the Company's share of the net income of Le Mans R was included in equity in net income of insurance affiliates. Results of the Company's Lloyd's operations are included in the insurance segment, and are no longer shown separately. Summary unaudited consolidated financial data for the three months ended March 31 for each of 2002 and 2001 is set forth below (in millions except per share amounts):

Total assets as of March 31, 2002 were $30.6 billion, compared with $28.0 billion as of December 31, 2001. Fully diluted book value per share as at March 31, 2002 was $40.94 compared with $40.35 as at December 31, 2001.

Net investment income from general operations was $155.6 million in the first quarter of 2002, compared with $143.1 million in 2001's first quarter. Net realized losses on investments and net realized and unrealized losses on derivatives in the first quarter of 2002 was $119.2 million compared with net realized gains of $60.2 million in 2001's first quarter. The Company's equity in the net income of its investment affiliates for the first quarter of 2002 was $32.2 million in 2002 versus $20.4 million in the first quarter of 2001. The Company's equity in the net income of its insurance affiliates was breakeven in the first quarter of 2002 versus $8.0 million in the first quarter of 2001.

The combined ratio for the Company's general insurance and reinsurance operations was 92.0% in the first quarter of 2002 compared with 93.9% in the first quarter of 2001. The loss ratios were 63.2% and 61.3% in the first quarters of 2002 and 2001, respectively, with corresponding expense ratios of 28.8% and 32.6% for the same quarters, respectively.

Commenting on the first quarter results, Brian M. O'Hara, President and Chief Executive Officer of XL, stated, "Our first quarter results reflect the strong growth and improved market conditions that we continue to see in all segments of the Company. Additionally, we have benefited from a flight to quality and from new premiums from the inclusion of XL Winterthur International and Le Mans R in the first quarter."

A live on-line webcast of a call with analyst and investors will be held at 10:00 a.m. Eastern Time on Tuesday, April 30, 2002 to review the first quarter 2002 results at www.xlgroup.com. XL Capital Ltd, through its operating subsidiaries, is a leading provider of insurance and reinsurance coverages and financial products to industrial, commercial and professional service firms, insurance companies and other enterprises on a worldwide basis. Additional unaudited supplemental financial information relating to the Company is available on its web site: www.xlgroup.com.

This press release contains forward-looking statements that involve inherent risks and uncertainties. Statements that are not historical facts, including statements about XL's beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: (a) rate increases and improvements in terms and conditions may not be as large or sustainable as XL is currently projecting; (b) the size of XL's claims may change due to the preliminary nature of reports and estimates of loss and damage; (c) the timely and full recoverability of reinsurance placed by XL with third parties; (d) the timing of claims payments being faster or the receipt of reinsurance recoverables being slower than anticipated by XL; (e) increased competition based on pricing, capacity, coverage terms or other factors; (f) greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than XL's underwriting, reserving or investment practices anticipate based on historical experience or industry data; (g) developments in the world's financial and capital markets which adversely affect the performance of XL's investments and XL's access to such markets; (h) the potential impact of government-sponsored solutions to make available insurance coverage for acts of terrorism; (i) developments in the Enron bankruptcy proceedings or other developments related to Enron; (j) the effects of mergers, acquisitions or divestitures; (k) changes in rating agency policy or practices that could have an adverse effect on the company's ratings; (l) changes in accounting policies or practices that could adversely effect the Company's financial statutory and other statements and reports; (m) legislative, tax or regulatory developments that could adversely effect the company or the ability of customers or brokers to do business with the Company; (n) changes in general economic conditions, including inflation, foreign currency exchange rates and other factors; (o) the effects of business disruption or economic contraction due to terrorism or other hostilities; and (p) the other factors set forth in XL's most recent report on Form 10-K and XL's other documents on file with the Securities and Exchange Commission. XL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Notes:
The supplementary information contained herein is being furnished for the convenience of the reader only, and does not purport to be complete. Percentage changes are based upon the rounded numbers shown above. Investors should refer to XL Capital Ltd's Form 10-Q for the quarter ended March 31, 2002 to be filed with the SEC (and XL Capital Ltd's other documents on file with the SEC) for a complete description of XL Capital Ltd.